NEW YORK/REHOBOTH BEACH, Del., Oct 29 (Reuters) - Hurricane Sandy, one of the biggest storms ever to hit the United States, began battering the densely populated East Coast on Monday, shutting down transportation, forcing evacuations in flood-prone areas and interrupting the presidential campaign.

Fierce winds and flooding were expected along hundreds of miles of Atlantic coast and heavy snows were forecast farther inland at higher elevations when the center of the storm moves ashore Monday night near Atlantic City, New Jersey.

U.S. stock markets closed for the first time since the attacks of Sept. 11, 2001, the government in Washington shut down and school was cancelled up and down the East Coast. About 150,000 customers were without power by midday and millions more could lose electricity.

``This is going to be a big and powerful storm and all across the Eastern Seaboard I think everybody is taking the appropriate preparations,'' President Barack Obama said at the White House.

State governors from Virginia to Massachusetts warned of the acute danger from the storm for the 60 million residents in its path. Nine states have declared a state of emergency. Experts said economic losses from the storm could reach $20 billion.

``There will undoubtedly be some deaths that are caused by the intensity of this storm, by the floods, by the tidal surge, by the waves. The more responsibly citizens act, the fewer people will die,'' Maryland Governor Martin O'Malley told reporters.

Off North Carolina, the U.S. Coast Guard rescued 14 of the 16 crew members who abandoned the replica tall ship HMS Bounty, using helicopters to lift them from life rafts. The Coast Guard continued to search for the two missing crew members.

The U.S. National Hurricane Center (NHC) said the Category 1 storm had strengthened as it turned toward the coast and was moving at 18 miles per hour (30 km per hour). It was expected to bring a ``life-threatening storm surge,'' coastal hurricane winds and heavy snow in the Appalachian Mountains, the NHC said.

In Fairfield, a Connecticut coastal town and major commuter point into Manhattan, police cruisers blocked the main road leading to the beaches and yellow police tape cordoned off rocky side entrances.

Beach pavilions were boarded up with plywood, and gusts of wind rocked parked cars.

``People are definitely not taking this seriously enough,'' police officer Tiffany Barrett, 38, said. ``Our worst fear is something like Katrina and we can't get to people.''

Some 250 miles (400 km) to the south, several feet of water flooded streets in Rehoboth Beach, Delaware, which could be right in the target zone of the storm.

Police knocked on doors on Sunday, reminding people there was a mandatory evacuation. While the police took names, they allowed residents to stay at their own risk.

Forecasters said Sandy was a rare, hybrid ``super storm'' created by an Arctic jet stream wrapping itself around a tropical storm.

The combination of those two storms would have been bad enough, but meteorologists said there was a third storm at play - a system coming down from Canada that would effectively trap the hurricane-nor'easter combo and hold it in place, amplifying the inland flooding effects.

Moreover, the storm was coming ashore at high tide, which was pulled even higher by a full moon.

The storm interrupted the presidential campaign with eight days to the election.

Obama canceled a campaign event in Florida on Monday so he could return to Washington and monitor the U.S. government's response to the storm. Republican presidential candidate Mitt Romney canceled campaign stops on Monday night and Tuesday.

While Sandy does not pack the punch of Hurricane Katrina, which devastated New Orleans in 2005, it has been gathering strength as it approaches the U.S. coast. It killed 66 people in the Caribbean last week before pounding U.S. coastal areas as it moved north.

Winds were at a maximum of 90 mph (150 kph), the NHC said in its 11 a.m. (1500 GMT) report, increasing throughout the day. Tropical storm-force winds reached as far as 485 miles (780 km) from the center.

THE SUPER STORM

New York and other cities and towns closed their transit systems and schools, ordering mass evacuations from low-lying areas ahead of a storm surge that could reach as high as 11 feet (3.4 meters).

By early Monday, water was already topping the seawall in Manhattan's Battery Park City, one of the areas evacuated by Mayor Michael Bloomberg.

He ordered 375,000 New Yorkers to evacuate and told those who remained to leave immediately. ``Conditions are deteriorating rapidly and the window for you getting out safely is closing.''

All U.S. stock markets were closed on Monday and possibly Tuesday, the operator of the New York Stock Exchange said, reversing an earlier plan that would have kept electronic trading going on Monday.

The United Nations, Broadway theaters and New Jersey casinos were forced to close, and more than two-thirds of the East Coast's oil refining capacity was in the process of shutting down.

Airlines canceled flights, bridges and tunnels closed, and national passenger rail operator Amtrak suspended nearly all service on the East Coast. The U.S. government told non-emergency workers in Washington, D.C., to stay home.

The storms could cause up to 12 inches (30 cm) of rain in some areas, as well as up to 3 feet (1 metre) of snowfall in the Appalachian Mountains from West Virginia to Kentucky.

While Sandy's 90 mph (150 kph) winds were not overwhelming for a hurricane, its exceptional size means the winds could last as long as two days.

Up and down the coast, worried residents in the hurricane's path packed stores, searching for generators, flashlights, batteries, food and other supplies in anticipation of power outages.

Johnny Lopez, an owner of Best Buy Wines and Liquors in Brooklyn, said he plans - ``God help us!'' - to stay open all day on Monday and Tuesday.